Wall Street’s prediction on market challenges in 2022

In 2022, markets could face challenges from the COVID-19, high inflation, and the Fed's attempts on controlling inflation. "Part of the disruption could break these barometer records," said Sam Stovall, chief investment strategist at CFRA Research, adding that the next coronavirus variant should be the primary concern.

The Omicron variant is the latest variance of the coronavirus. While recent research has shown that cases of Omicron are milder than previous virus variance, it is highly contagious and has already impacted on consumer demand in some industries, while others remain relatively unaffected.

Second, the Fed has made it clear that it intends to raise interest rates in response to high inflation. Many economists expect those rate hikes to begin sometime next year. "It's concerning because if the Fed raises rates too aggressively, it could throw markets into chaos," Stovall said. "Also, historically, we've also seen a contraction in the P/E multiple as we enter a rate hike cycle."